Rants and Raves on Espresso

We previously wrote of our annoyance with the old and ever-popular yarn spun by wannabe personal finance gurus who constantly tell us we can become millionaires by quitting our daily coffee habit — or by replacing it with home-brewed coffee. For the record, we have a lot of coffee both out (as evidenced by CoffeeRatings.com) and in the home. But we’ve always thought that home-brewed coffee is hardly the magic path to champagne wishes and caviar dreams. This time we do a little of the math to show why.

Many of these personal finance hacks first fail to recognize that coffee, for at least some people, is one of life’s small pleasures. The idea of giving it up entirely makes about as much sense as giving up other “superfluous” things in life — such as haircuts, your child’s dance lessons, and cable TV. Once you get past that logic, the debate then becomes about the private jets you’ll be able to afford by making your own coffee or espresso at home instead of paying Starbucks each time for the mythical $32 coffee beverage. (Hey … inflation. OK, so we’re exaggerating about the $32 beverage to make a point. But then again, so are they.)

We recently came across a blog post, similar to the thousands of others just like it, where a “home savings tip” savant posted on how she saved a “small fortune” by switching from her thrice-weekly Starbucks habit to a stove top Bialetti coffee maker at home.

Let’s do the math

Small fortune, eh? Let’s do the math. A $4 bucket of Starbucks’ pumpkin-pie-flavored Cool Whip, purchased three times a week, will set our home-savings-tip heroine back about $12 a week — or about $600 a year.

A new Bialetti will set her back about $20 — which is nice and cheap compared to some of these ridiculous $1,200 hulking piles of home espresso machine plastic that typically produce shots inferior to even Starbucks’ dubious standards (Jura, anyone?). Then add a chop grinder for about $30, and her capital outlay comes out to be about $50.

Now since fresh roasted coffee is like fresh baked bread, the supply needs replenishing every couple of weeks before it goes stale. So if she’s buying Starbucks’ coffee (and it is pretty much already stale when you buy it), that should set her back about $6 for a half pound. Then add some incidental charges for milk, pumpkin pie flavoring, and tubs of Cool Whip — but for the sake of argument, we will consider it negligible (which it isn’t).

That comes to about a $50 capital outlay plus $6 every two weeks = about $200 in the first year.

Labor costs: because your time isn’t free

Now let’s factor in labor costs. Starbucks’ costs are dominated by labor, not coffee. To say that your labor comes out in the wash is deceiving yourself: your time is money. The federal minimum wage is $5.85 per hour (in SF, it is $9.36) — and let’s say her time is only as valuable as the lowest fry cook at McDonald’s at $6 an hour. And let’s say that making these coffee drinks at home takes about 15 minutes of her time — between grinding, watching the stove, steaming milk, washing dishes, cleaning the espresso machine, etc. All the work that Starbucks pays someone else to do for you. Three times a week for a year comes to about 40 hours of labor a year = $240.

So in her first year, you compare her $600 Starbucks habit to $200 + $240 = $440. So she saved maybe a whopping $160 in the first year — minus her additional expenses for milk, pumpkin pie flavoring, and Cool Whip. And her coffee wasn’t probably nearly as good as the kind and variety she had buying out: the coffee supplies were probably more stale, the consistency wasn’t right, and she was using equipment and skills that were a fraction of what the pros have. (After all, a moka pot doesn’t even technically make espresso to begin with.)

Add that she had to put up with this inferior coffee for a whole year. Then add that she just valued her own time at the lowly wages of a fry cook working a burger joint fronted by a clown.

But what if you buy a $1,200 home espresso machine?

But at least she didn’t buy some $1,200 Jura (likely without a decent grinder, we might add) that will require her to grin and bear hundreds of inferior espresso shots before she breaks even on the purchase price alone. Or worse…

Home espresso machines, for most buyers today, are the home exercise treadmills of the previous decade. She could easily tire of the inferior shot quality she gets at home, and she could tire even more of doing all the labor herself. After all, we live in a society that can’t even be bothered to slice an apple or toss a salad because it’s too much effort. This means that not only does she return to her regular Starbucks habit, but she does so with an additional $1,200 hole burned into her pocket — now that her home espresso machine is gathering dust in the kitchen corner.

This is why we generally recommend a home espresso setup for less than five percent of the people who ask about one. Unless you’re in it for the pursuit of higher quality shots, you’re going to be gravely disappointed. Don’t even think that you’re going to save much money with a home espresso setup unless you can make the time commitment — and if your taste buds can’t tell the difference in quality.

All this talk about “doing the math”… You know who has done the math several times over, before any of us even considered it?: Starbucks’ marketing department, that’s who. You can bet your double-tall, four-pump vanilla caramel macchiato that they know the lifetime value of their customers. And if Starbucks is devoting expensive retail space to selling home espresso machines in their cafés, how naïve does one have to be to think they’re doing it at a known net loss of customers and profits?UPDATE: May 8, 2010
Yesterday we published a little research that shows some sample, third-party breakdowns of the actual costs that go into the price of a retail coffee: The social politics and economics of coffee prices | Espresso News and Reviews – TheShot.coffeeratings.com. As highlighted here, labor costs overwhelm any ingredient costs — underscoring that the economics of home coffee making are really about how much you value your own time and labor.UPDATE: Aug. 20, 2011
Thankfully, there are occasionally sane voices out there saying, “Saving money on coffee is the most useless piece of advice that a personal finance blogger can give”: A Cup of Coffee Isn’t Just a Cup of Coffee.

33 Responses to “Think you’re saving a small fortune making coffee at home? Do the math.”

Including labor costs is just silly. Most people can’t simply choose to do slightly more work to pay for coffee in the way that they can choose to make coffee every morning. However, even if they could this wouldn’t be a legitimate argument since for many people it will take them the same 15 minutes to go to Starbucks and get coffee. Perhaps you should also add that $240 to the $600 figure?

Most people devalue their own time at a ridiculous level. I know people who have struggled for two hours getting their oil filter off, their oil pan drained, and replacing it all just to save the $10 (once you subtract the cost of replacement parts) versus having their oil changed down the street.

When you spend $4 on a bucket of Starbucks’ pumpkin-pie-flavored Cool Whip, you’re mostly spending money to cover Starbucks’ labor costs. People whine and lament that Starbucks is ripping people off because you can get a cup of coffee for a mere $1 down at the diner — but the diner need only have an untrained monkey take 3 seconds to dump a Bunn warmer coffee pot into a styrofoam cup: there’s no timing for an espresso shot, no preparation of milk frothing, no pumpkin pie and Cool Whip mashing. The big difference is labor, but nobody seems to recognize that. All coffee is just “coffee”, right? Wrong.

You’re fooling yourself if you think your time is free and therefore worthless. Any 15 minutes you spend making your own bucket of pumpkin-pie-flavored Cool Whip is 15 minutes you’re not answering customer service calls working for The Man, 15 minutes you’re not making millions off online stock trades, or 15 minutes you’re not writing that hockey-stick growth business plan for your new start-up. The economics of making coffee at home versus having it out is a primarily question of labor costs, not materials. Analyzing it any other way is a false premise.

For the people who drive special to get coffee, it’s not like they were probably going to play shut-in for the day. Or that their steady home supply of coffee, milk, pumpkin pie flavoring, and Cool Whip comes out of the tap. Of course, where I work, a Peet’s is just down the stairs…

In my wayward youth I was a manager for Starbucks Coffee Co. Over my tenure I sold thousands of dollars worth of at-home brewing and espresso gear. The novelty of at-home coffee and espresso wore off within months (if not weeks) and time after time those customers were back in our line… every morning.

At some point you recommended thinking about this in an email to me and it was 100% right. Small World espresso isn’t perfect, but it costs less than $2 and I don’t have to do any cleanup. I can also french press good beans at home in under 10 minutes and without the four-figure investment in a grinder and espresso machine that wouldn’t fit on my counter.

That said, if I had a couple K floating around, I’d probably go for a home setup.

Just came up on this website and came up on this post. I’m a coffee lover and really into personal finance.I agree that we need to consider personal enjoyment and convenience as part of the coffee experience and it’s hard to judge that against dollar and cents.

However, from a personal finance point of view, that “small pleasures” costs can add up, especially for those who can rationalize the cost and want things now and are unable to save long-term. Also, who has coffee 3 times a week? It’s more like 3 times a day!

Plus, you should consider that the $600 is money spend after taxes. You’d need to work say $850 unless you could somehow write those off as business expenses.

You should also not consider factoring your working hourly wage when making it at home unless you would have used that time to be working and making money as opportunity costs. Chances are at home, you’d be reading a newspaper or checking your email. Might as well take some personal enjoyment in making your own espresso … perhaps by saving that $400 (more if saved in a tax deductible investment) a person could open their own small cafe when they are financially free to do anything they want.

Thanks, 5.JM. While I understand your points, I don’t agree with them at all for the same reason I don’t churn my own butter to save a few bucks. “Free time” is a myth.

Not to mention that I don’t buy into the deconstructed, non-integrated, superpositional microeconomic thinking upon which these hypothetical debates rest. If you applied the same principles to weight loss in isolation, they would suggest that we should be a nation of emaciated supermodels instead of tragically obese ever since the public wholly embraced diet soft drinks 20 years ago.

Have you ever considered the labor costs (lost) by watching cable TV? Oh, maybe that’s not a good analogy because you need to do something to “unwind”. Perhaps engaging in activities that you enjoy is “priceless”.

Mac, I understand that some small subset of people will willingly perform certain types of labor for free. But the number of Ben Rogers who will happily paint Tom Sawyer’s fences for free are in the clear minority.

To your example, just how many people really get paid to watch cable TV? Then contrast that number with the over 100,000 employees at Starbucks alone who are paid to be Verismo jockeys.

I just don’t foresee news headlines about cable TV viewers trying to unionize. And it’s not like Starbucks has to turn away a volunteer army that wants to operate their stores.

Though I wouldn’t put it past these personal finance fraudsters, with their bogus financial assumptions, telling us we could put our kids through college just by watching cable TV.

-Most people already own a coffee machine. For them, its a sunk cost and should be excluded from the analysis (anyone with biz knowledge would agree). Same for grinder. Although owning a grinder isn’t as common, one can also use the machine at the grocery store.

-15 minutes labor is overstated. I spend less than 5 minutes every morning (start machine, clean thermo, fill with hot water, hit the shower, fill thermo, flip machine off) and use a thermo that lasts all day ($30 investment). Also, I save TIME AND GAS by not going to Starbucks. The cost for time and gas going to the grocery store is a sunk cost (except maybe the 30 second diversion to the coffee aisle). Furthermore, I think you should measure the OPPORTUNITY COST of spending time brewing coffee, not the LABOR COST. Thus, I think your minimum wage is overstates the cost. Regardless, I think its fair to say (even conservative) that the time and gas saved from avoiding the trip to Starbucks = approx. opportunity cost of brewing at home.

-I am not sure why you included flavoring for the coffee (and why you picked the Coolwhip). You picked an expensive flavoring, probably on purpose to support your claim. One could easily buy flavored coffee or flavored cream and save $$$.

In sum, I agree that making coffee at home results in a materially different product, but it clearly saves money. Also, I was buying 3 cups a day ($2+$1+$1 = $4). That’s approx $88 a month or $1,056 per year and doesn’t count the times I bought some kind of breakfast sandwich or bread on the side.

In my mind, someone should crunch the numbers in accordance with their own preferences (flavored, w/ or w/o cream, etc.) and subtract from the approx cost of Starbucks and then ask: is getting Starbucks everyday worth $XXX.XX dollars to me? I did so for myself and quickly realized it was not…

Side note: I sense some serious motivated reasoning going on here…do you have a financial interest in Starbucks or are you just economics-illiterate?

Not all time is equal. For instance, time during my lunch break is FAR more valuable than time cut out of my sleep (at least for the first 15). One needs to ask, what would I do with the time I spend making coffee? For most, its probably watching the news or sleeping. Quick fix: switch to online news and get the info much quicker (no commercials, faster delivery, and ability to select only relevant news).

Also, I do agree that making coffee at home is not going to save a LOT of money…its not going to make you a millionaire. However, for most Americans during these tough economic times, coffee should be the first thing to go from the budget (along with eating out).

I just crunched the numbers for a client and found that cutting out Starbucks and switching to at-home coffee would allow them to save $100 in interest payments on their car loan AND finish their payments 4 months earlier. Once the loans repaid, they can reduce their insurance coverage and save another $50 a month.

For years now, overly simplistic economic analysis in the absence of human factors has tried to smugly promote itself as financial wisdom. When in fact, it’s these very human factors that lack direct numerical measurement (human laziness and convenience, taste preferences, etc.) that make or break the equation. The fact that no one even mentions these human factors in their analysis constitutes personal finance malpractice, because they are the key difference between a consumer saving and losing money. If people were really just automatons ruled by simple mathematical platitudes, we’d have a supermodel problem instead an obesity one.

Case and point is Starbucks itself. Starbucks sells home espresso machines in their stores. And they’ve been doing it for years. If you take this half-baked economic analysis in isolation to be entirely valid, you have to believe that Starbucks is selling home espresso machines because either:

a) They’re marketing idiots and don’t realize that they lose lifetime customer profits with every sale — pretty much the same profits that a home espresso machine user would expect to keep for themselves.

b) They’ve recognized that enough of the general public will buy their home machines and yet still end up back in line, resulting in higher profit margins overall than if they didn’t sell home espresso machines to begin with.

From what you’re saying, you have to believe (a) to be true. We believe (b). Some people do come out ahead going their own route. But just as in Las Vegas, Starbucks knows that despite the few who might go home with extra cash in their pockets, overall the house wins in the end.

Unlike many of these armchair analysts, we’ve spent years living in the detailed economics of home espresso versus retail. But if you believe we’re somehow fans of giving money to Starbucks, it’s pretty pointless to continue. You clearly don’t know what this Web site is about — and can only muster a blogging drive-by because you’re offended that someone with first-hand experience questions your incomplete math.

Your point regarding “human factors” is unclear. Are you saying that someone will fail to only drink home brewed coffee because they can’t kick the habit of buying at coffee houses? If so, you are presenting a very different argument than you were previously. In fact, I would agree that COMPLETELY kicking the habit is probably unreasonable (especially given the addictiveness of caffeine). However, even drinking some home brewed coffee will save money.

The two possibilities you give for Starbucks are not collectively exhaustive. For instance, consider the below possibility:

a) Starbucks sells the machines because they know that people willing to buy expensive machines do so for status, and continue buying Starbucks. Or, that customers buy the machines for some reason but do not buy because they plan to stop buying from Starbucks(I find this reasonable).

b) Starbucks sells machines knowing that it will loose SOME profits, but that its better to sell the machines themselves as opposed to letting customers buy the machines elsewhere. This conclusion is consistent with game theory. A good example: notice how online retailers will sometimes allow competitors to advertise or sell on their website. They would rather keep the traffic (or monetize traffic leaving the site) by including competitors than loose the traffic.

c) Starbucks makes MORE money selling the machines because they anticipate users buying Starbucks coffee beans after buying the machine (similar to a razor-blade model). Even loyal customers still make coffee at home. My guess, that’s the reason Starbucks started selling coffee in the first place: they never expected coffee drinkers to buy EVER cup from Starbucks and found a way to monetize at loyal customers’ home brewing.

Furthemore, even if the “house wins in the end”, that doesn’t mean that the consumers can’t make BETTER buying decisions and save money (i.e., make coffee at home). I don’t see how Starbucks winning means the consumer is losing. Bad inference.

Also, yes, it was a drive by blog. No, I don’t know what the site is all about. However, that says nothing about my claim: your objection is a fallacy of irrelevance.

Finally, I think your original post has some merit. Namely, at home coffee is not the same quality as coffee house coffee. Even with the correct equipment, coffee making (especially espresso making) is an art, not a science. But to say that people are better off FINANCIAL by buying at a coffee house is misleading.

SIDE NOTE: My questioning your working for Starbucks was purely rhetorical, much like most of your post. However, I left it for my footnote…

The “incomplete” part is the human factors: laziness and our avoidance of labor, the personal preferences for the qualities of one form of coffee versus another, etc.

To tell people that they are better of financially by doing it themselves at home is entirely misleading, because every example of this I’ve seen presumes:

there’s zero work, effort, nor time involved with making coffee at home,

that people do, and should, put zero value on their leisure time,

that the quality they get at home is going to meet their minimum requirements relative to what they used to have going out for coffee, and

that consumers never fall back on old habits they previously enjoyed.

To keep it brief and less of a complete bore (my Starbucks espresso machine sales example seems to have just sent this off on a tangent): this is what it boils down to.

And if there’s one thing you should come away with about this site, it’s that we’ve documented reviews of over 2,000 shots of espresso served at over 800 cafés worldwide. And we’ve made at least as many shots at home ourselves — including roasting our own coffee beans for the past 7 years. So, when we point these issues out, we believe we have a bit of actual first-hand experience with this home-vs-out coffee business over the years.

Which is why we are dumbfounded that every single brain-dead “make your own coffee, save millions in cash” mantra posted weekly on this topic presumes human behavior can be effectively modeled by a simple spreadsheet. It’s as if these platitude articles are written by people who really don’t know much of anything about decent coffee.

Well, I agree (to some extent) with your conclusion (namely, kicking a Starbucks habit is not easy) but its very different from saying “making coffee at home doesn’t save money”. I agree that habits are difficult to change, but this says nothing about what one COULD save by making coffee at home. Same for the quality of coffee.

For the time considerations, I showed you in my analysis that I don’t spend 15 min every morning making coffee. I spend 5 minutes. That’s 1/3 your calculation.

For the value of time, one should either take the opportunity cost of the 5 minutes they spend in the morning OR place a SUBJECTIVE value on their time. Then, they can crunch the #’s and decide (as I said earlier): is saving X amount of dollars worth not getting Starbucks? Also, one can easily calculate how many times they would need to “slip” before breaking even.

Finally, I would like to add that I brew my own coffee at home and roast my own coffee. I also have experience buying coffee: I was drinking 3 triple shots a day for the last few months (last year was my first in a PhD program). Roasting at home does not save money because of shipping and the “water weight” you pay for when buying green coffee beans. Nevertheless, i do it because I enjoy it and find it worth the money, even though I COULD save money doing otherwise.

I enjoyed our discussion. Please share a good website to purchase green coffee beans as you probably have more experience than I do.

You spend 5 minutes making coffee because apparently you’re not one of the many people who order a double-tall, four-pump vanilla caramel macchiato every day (i.e., people who think they like coffee, but drink anything but — e.g., the $4 bucket of Starbucks’ pumpkin-pie-flavored Cool Whip). That and your standards may be a bit low.

It may take a pro a mere minute to make one of these milkshakes in a cafe, but much of the set-up, warm-up, take-down, clean-up, etc., that happens every day at a café must now happen for one customer: you. Just last week, I had a barista spend 10 minutes tuning his machine and getting his shots right for my single espresso, as I was the first customer of his business day.

As for time, we’re always forced to make choices to do x or y as an opportunity cost. Because what wouldn’t be cheaper if we did it ourselves? Heck, we could be building our own cars from kits if that’s the ultimate criteria here — and most of us own cars. So simply saying “it’s cheaper to do it yourself” offers zero additional useful information. That’s a moot point without the additional context.

I love Starbucks too, man. But you’re full of it. Fresh is better, home brew is cheaper. It won’t buy you a jet, but no frugal person would ever buy a jet anyway. It could save you enough for a used car, which someone trying to save money is much more likely to buy!

If you think we like Starbucks, Jessica, then you know nothing about this Web site. But yes — fresh is better, home brew is fresher, and home brew can be cheaper.

As an extreme example to illustrate this point (is this really so hard to understand??), imagine that I am a Wall Street trader dealing in the bulk sales of questionable mortgage derivatives who pulls in $10 million annually. That comes out to around $5,000 an hour for a 40-hour work week.

Are you telling me that the time and effort I spend making coffee at home will actually save me money compared to my spending that time on the phone fleecing some bank or wannabe homeowner?

This has to be the stupidest post ever and clearly written by a shop owner. I got news for you, making your java at home saves the average daily drinker between $200-300/month for a couple and more if you go multiple times a day. It is an easy way to save a huge amount of money, easier for std coffee than espresso, but for $3k a year go buy the most expensive machine out there and do the math.

Yes, and dont forget that cream. Since you have to buy what the shop does, you need to buy a 55 gallon drum for $1200 month right? No you can’t just buy a normal size container. Plus what about the stirrers, you have to buy a gross for $44, you can’t just use a spoon, imagine the washing up costs!!!! And what about all the time to make the coffee! Yes thats right, driving or going to a shop doesnt count, just that awful amount of work of going in your kitchen and pressing a button…. oh how terrible. Yes those $5/cup at Starbucks is a bargain, they would easily cost you $144 per cup to make it yourself. Give me a break, suckers that what they want everyone to be.

Don’t do it, just becuase a pot gives you 12 cups, its swill I tel you, aweful stuff. Don’t drink it, get those 12 cups at Starbucks, don’t be fooled even though it will cost you $48, it is cheaper!!!! Just becuase you think it cost you about $1.75 for the pot don’ be fooled, the electrical costs to make it were at least .25!!!!! My fingers are still tired from hitting the on switch and what a chore to dump those grounds, damn I need to get into PT

2) I even roast my own coffee at home. This should apparently be saving me scads more money than those foolish saps who get raped buying only roasted beans in the stores at a 2x mark-up over buying unroasted green beans.

3) The point still stands: people do not operate by rational thought alone, particularly when it involves their own effort. This is why diets fail so miserably for so many billions of people.

With my home setup in use for the past 9 years, factoring in my time and the quality of supplies I get to make it worth my while, it’s a toss up as to whether my home setup net saves me any real money or not. When I make espresso at home, it’s either because I want something specific that I can’t find in shops, that I want something better (though there’s a lot of excellent retail options out there now), or that it’s convenient. It’s never to save any money.

Hehe, the “battlefield” switches again from “superautomatic espresso machine debate” to “save $$$ by making coffee at home”. It’s amazing what Google can do to you (i.e. your website) these days.

I agree on the point “…I make espresso at home, it’s either because I want something specific that I can’t find in shops,… or that it’s convenient. It’s never to save any money.”
Even my colleague only counts the Rp (not $) he spent on coffee (per serving) only when he’s trying to count how much money does he actually spend when he’s using a handheld, manual, espresso device, with N20 cartridges.

Aside from that… Only the machine’s price does matter. The only thing matters after that is how much you can lobby your spouse on your coffee beans and milk shopping each month (as what happened to my other colleague)…

Perhaps making pour over coffee at home might make sense economically, but for espresso, which tends to be more labor intensive and have so many different variables affecting the outcome of the final product, you might as well just go to a good cafe. I was looking at getting a MyPressi for the one espresso a day that I drink, but it just doesn’t make sense. In SF, it costs $2-$2.50 for a standard blend and ~$3 for a single origin, and making it at home I might spend a little less than half that on materials like coffee and nitrous oxide cartridges, but I don’t think I would come close to replicating the final product of my local barista at places like Four Barrel, Sightglass, and Blue Bottle (not to mention the time it would take to produce the shot). Plus I don’t have to drink the same beans every day — I can change it up from one day to the next (something I can’t do on a cost efficient basis at home), and I get to hang out in a cool cafe space for a few minutes as a daily diversion. Note that I am in no way making a comparison to Starbucks, which has bad coffee and dull, homogenous cafe spaces. A good espresso in a nice cafe really is one of life’s simple pleasures.

Count me as one of the people that thinks I’m saving money making my coffee at home. Actually I know I’m saving money.

I have a cheap espresso machine that I haven’t used in years. I’ve always been more of a fan of brewed coffee though. The occasional cappuccino or latte out at a nice cafe is something I enjoy but for my daily caffeine dose I don’t want something with a lot of extra calories.

I like my coffee strong but I’ve never been able to get a good strong cup at home. The bad flavors always came out more than the good coffee flavors. I’ve never really liked Starbucks but I always thought the coffee from other places I have coffee were better than mine. Places like local cafes, restaurants, diners, Dunkin’ Donuts and even 7-11.

At some point about a month ago I got fed up and decided to learn as much as I could about making great tasting coffee at home. It’s not that hard.

Now I use a Clever Coffee Dripper and enjoy my coffee even more. If I were willing to spend more money there are some good automatic drip machines that I discovered while researching the subject but I didn’t want to spend over $100 on a coffee maker so went with the Clever for around $15. My blog has some more information I discovered in my quest to brew great coffee at home.

One interesting thing I came across is that only 15% or so of coffee drinkers don’t make their own coffee. This was from a report that came out a few years ago. That might account for why Starbucks sells coffee makers. They don’t expect their current coffee buying customers to start making their own coffee, they’re just trying to find ways to get the much larger home-coffee-making market into their stores.

The argument you make about labor doesn’t apply in my case. Maybe it applies more if you’re making espresso based drinks that require you’re attention throughout the whole process, but as I mentioned earlier, I think those drinks shouldn’t be part of one’s daily routine.

With an automatic drip coffee maker it only takes about 2 minutes to grind and set up the water. Then it does it’s thing without intervention.

Even the Clever Coffee Dripper doesn’t take much time. Less than 15 seconds to put water on the stove to boil. I’ve discovered that water will boil whether I watch it or not so I choose to start making my breakfast. Then at some point while my breakfast is cooking I grind some coffee (only about 45 seconds in a manual burr grinder) and pour the water into the brewer. Brews while I eat and I just have to get up to let it out which only takes a few seconds. Cleanup is just tossing the filter and a quick rinse.

Even if it took me 15 minutes a day to make my coffee and I couldn’t do anything else… Factoring the labor would only make sense if there was some way that I could make money in that time instead.

Can I run to McDonalds for 15 minutes every morning to make that $1.50 you talked about? Will an employer pay for another 15 minutes a day now that I have the time free?

Best thing though… I don’t have out to a store, wait in line, and spend money. I have a great tasting cup of coffee before I even put on pants!

If you’ve never had to skip your morning coffee because you were in a rush to get to work or something, I’d agree that you have no labor costs. But this happens to everybody at some point.

And yes, you can save money making your own coffee. You can save money beating your clothes against a rock by the stream for that matter. But that wasn’t my point.

My main point was that people financially treat retail coffee as if it were merely a matter of raw materials. If that were the case, I should be able to reasonably pay you several cents in cleaning supplies to clean my toilet every week. Some of us may prefer to churn our own butter from milk and save a little coin, but we live in a society where we are willing to pay extra for a lot of conveniences.

That didn’t come across as your main point based on your title and the majority of the content in your post

Most people understand they’re not just paying for raw materials. A portion of every cup of coffee has to pay for not only staff at the store but also the executive’s salaries as well as real estate, warehouses, distribution, marketing, electric, heat, waste pickup, etc.

For most people, making coffee at home involves, scooping some grounds from a can, pouring some water and flipping a switch which takes less than 3 minutes which is the average time people wait for their drinks at starbucks.

Even when I wake up late I don’t run out in the clothes I went to bed in. By the time I’m done with even a rushed teeth brushing, showering, getting dressed the coffee is ready to pour in a travel mug.

Comparing it to washing your clothes in a stream is a bit extreme. I see it more akin to people that have breakfast at a diner because they haven’t mastered scrambling an egg. Not quite as bad as the people that go out for a bowl of cereal. (That one always puzzles me )

Most people aren’t that picky about the taste of coffee. They want something warm and tolerable that has caffeine every morning.

Most people that buy 1-2 cups a day aren’t going to save enough to buy a private jet but they will save enough to have a few hundred bucks extra a year to put towards something they want, rather than to pay for the jets that the Starbucks execs are buying with your coffee money.

If people are getting very rich selling coffee then there’s obviously money to be saved by not buying it.

It’s not stopping one thing that makes you rich, it’s stopping to think of ways to spend less when you don’t have to. Saving a little money here and there really starts to add up. A few hundred a year from buying less coffee, eating out less often, driving less often, etc and you’re taking a better vacation, putting more money away for your kids college or towards your retirement.

Same principle applies to weight loss. A few less calories taken in, a few extra calories burned and next thing you know you’re fitting back in that pair of college jeans you found while cleaning out your closet.

I would make a bet that more than 95% of consumers don’t realize that the #1 cost in a retail cup of coffee is labor. People whine all the time about how much a coffee costs out vs. in, but they seem clueless as to why that is. If you cannot first recognize that, you don’t understand the economics of making coffee to begin with.

And you can trivialize the few minutes here and there to prepare and brew home coffee. But it still takes time and focus. A baker isn’t paid only for the time they put something in the oven and when they take it out, as a failure between the two can destroy the end product.

And I’m missing all the people getting very rich selling coffee. For the second-most traded commodity in the world next to oil in terms of money, there are no Dubais or Saudi Arabias built on the backs of coffee exports. There are no coffee barons buying up international soccer teams. There are no coffee barons on the Forbes Richest list.

Sure, saving a little money here and there adds up. “A penny saved..” goes back to Ben Franklin. But getting rich isn’t about nickle and diming. It’s more about making big decisions and big, smart risks — like taking out loans to start a business, or marrying the right person that won’t take half of what you own in one fell swoop.

But people are lazy when they write and nobody likes to talk about that. They’d rather pretend to be smart by telling us how we could afford new homes by making our coffee at home just like the bazillion other bobbleheads with personal finance blogs who have echoed this over the past decade.

As for people not making fortunes selling coffee… Both Robert Stiller founder of Green Mountain Coffee Roasters and Howard Schultz CEO of Starbucks who were or are currently on the Forbes 400 list. There are other top executives at these companies that most would consider “rich” as well.

If the Fair Trade Federation or another organization can ever get to the level of OPEC then you might start seeing the equivalents of Dubai and Saudi Arabia in the coffee world.

The problem isn’t that nobody is getting rich selling coffee. The problem is that too many people are making money as coffee travels from the farm to the cup. When you make your own coffee at home you are cutting out a large percentage of what makes coffee shop coffee expensive.

People do accumulate wealth by making better financial decisions even when it comes to seemingly insignificant thins like a $2 cup of coffee. You should check out the book “The Millionaire Next Door” there’s a good summary on Wikipedia.

No, what that 83% suggests at best is that people find it either habitual, more convenient, or less expensive at home. There’s nothing to suggest they understand why it’s less expensive.

The whole premise here is about people who make decisions with long-term factors that aren’t obvious at first. For some that’s the accumulation of costs. But for others that’s being unaware of what they’re buying and what they’re subsidizing when they make one purchase decision versus another – because it’s not an apples-to-apples cost comparison.

The other thing I also don’t understand is the “too many people are making money as coffee travels from the farm to the cup” logic that villifies the minimum wage coffee shop employee who struggles to get any health benefits outside a Starbucks. In your light, he/she is merely a parasite on society. Are these people really so evil and the coffee farmer so noble?

Wow! I mention the CEOs of two large coffee companies and a couple of entities that speculated in coffee commodities and you try and say I’m against the minimum wage coffee shop employees?

Within a 2 block radius from where I’m sitting I can think of over 12 places where I can buy a cup of coffee. Only 3 of them are chain stores which include a Starbucks and Dunkin Donuts.

If there’s a problem with people not being able to find a job that provides benefits, or pays them enough to afford their own private insurance then that’s a different problem that needs to be addressed.

I haven’t been to a starbucks in years. I have bought coffee from other local establishments in that time though. I don’t like the taste of Starbucks coffee as much as I like other coffee and when I do buy coffee I prefer to spend it at establishments that are locally owned so that more money stays in the community. They wait time is lower too.

These are tough economic times for many and I don’t feel the need to go out of my way to spend money on something I don’t need to help support Starbucks’ 150k employees, including the top 5 execs that earned over $50 million including salary and exercised options last year.

It’s not just coffee. In the past 5 years I’ve only had food from fast food chain stores around 6 times. To me, places like Starbucks are like McDonalds. Unlike McDonalds which somehow manages to make a burger at a price comparable to what it would cost me to make myself, Starbucks charges much more than what I pay for making my own coffee. In both cases though, I’m much happier with my own results.

Although a lot has to do with my personal philosophy on how I spend my money, my morning coffee is like tying my shoes. I could probably pay someone to do a better job but I’m happy with how I do it and I like it done before I leave my home.

Akismet marked your last comment as spam, oddly, so I had to rescue it outta there.

Not that we shouldn’t pick on CEOs, but there’s one of them at Starbucks for 149,000 other employees. Maybe you believe that the CEO accounts for 80% of the entire payroll at corporations (actually, much of their pay is tied up in company stock) … I don’t know. But most of the labor costs in a retail coffee store are local labor rather than executive salaries — people like minimum wage baristas, toilet cleaners, garbage tossers, delivery truck drivers, etc.

So when you laud the great honor and nobility of coffee farmers but want to “stick it to the man” by making coffee at home, let’s be clear that the “man” you’re sticking it to is primarily a minimum wage mop-and-button-pusher who is too short on cash to remove his Dave Matthews Band tattoo. Not that the guy deserves your charity, but let’s be honest about where the money goes rather than conform reality to the convenience of political ideologies.